Correlation Between Expedia and Edison Nation
Can any of the company-specific risk be diversified away by investing in both Expedia and Edison Nation at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Expedia and Edison Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expedia Group and Edison Nation, you can compare the effects of market volatilities on Expedia and Edison Nation and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Expedia with a short position of Edison Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expedia and Edison Nation.
Diversification Opportunities for Expedia and Edison Nation
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Expedia and Edison is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Expedia Group and Edison Nation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edison Nation and Expedia is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Expedia Group are associated (or correlated) with Edison Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edison Nation has no effect on the direction of Expedia i.e., Expedia and Edison Nation go up and down completely randomly.
Pair Corralation between Expedia and Edison Nation
If you would invest 13,950 in Expedia Group on January 25, 2024 and sell it today you would lose (448.00) from holding Expedia Group or give up 3.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Expedia Group vs. Edison Nation
Performance |
| Timeline |
| Expedia Group |
| Edison Nation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Expedia and Edison Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expedia and Edison Nation
The main advantage of trading using opposite Expedia and Edison Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expedia position performs unexpectedly, Edison Nation can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Edison Nation will offset losses from the drop in Edison Nation's long position.The idea behind Expedia Group and Edison Nation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Edison Nation vs. Tesla Inc | Edison Nation vs. Toro Co | Edison Nation vs. BCE Inc | Edison Nation vs. Steven Madden |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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